"Households in the lowest income quintile, earning an average of £11,000 a year, ended October with a £74 weekly shortfall, 7% worse than last year. Those in the second-lowest bracket had just £10 left after essentials, a deterioration of 17% year on year. Middle-income families (£41,000 average) were left with £90 - a marginal fall of 1%."
"The tracker shows essential costs rose 4.6% year on year, driven by food, housing and utilities - categories that account for a disproportionately large share of expenditure among lower-income families. Younger households face the greatest squeeze: those under 30 spend 69% of gross income on essential items, largely due to soaring rental costs. The warning comes as unemployment hits 5%, labour market conditions weaken and Reeves prepares to unveil a Budget expected to include further fiscal tightening to address a £20 billion shortfall."
Disposable income has fallen for a fourth consecutive month, leaving one in five UK households unable to meet weekly essential bills. Low- and middle-income families, comprising 60% of households, are experiencing shrinking spending power as wage growth lags behind rising taxes and essential costs. Lowest-income households faced a weekly shortfall of £74 on average, while the wealthiest 20% saw discretionary income rise to £909. Essential costs rose 4.6% year on year, driven by food, housing and utilities. Younger households spend a disproportionate share of income on essentials, and unemployment has reached 5%, tightening the fiscal outlook ahead of a Budget.
Read at Business Matters
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